AbbVie is seeking a $3.5 billion impairment charge for a failed schizophrenia drug

• AbbVie said it is taking a $3.5 billion dollar impairment charge related to the failure of a drug it acquired in its purchase of Cerevel Therapeutics.

• The biotech company reported in November that its schizophrenia drug, emraclidine, failed to meet primary endpoints in a phase 2 trial.

• Abbvie explained that following the study, they began an evaluation of the impact of the results, “which resulted in a significant decrease in estimated future cash flows for the product.”

AbbVie (ABBVShares fell on Friday after the biotech company announced it would take an estimated $3.5 billion impairment charge due to the failure of one of its drugs.

The company wrote in a regulatory filing that the charge was related to emraclidine, an experimental drug for treating schizophrenia in adults that AbbVie acquired when it acquired Cerevel Therapeutics Holdings.

AbbVie reported in November that a Phase 2 trial of emraclidine found the treatment failed to meet its primary endpoints.

In the filing, the company explained that following the investigation, it began an evaluation of the impact of the results, “which resulted in a significant decrease in estimated future cash flows for the product.”

AbbVie’s shares, which were down 1% in recent trading, are up about 7% over the past year.

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